E
xhibit
10.72
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY BRACKETS, HAS BEEN OMITTED FROM PUBLIC FILING PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE U.S.
SECURITIES AND EXCHANGE COMMISSION. THE OMITTED INFORMATION, WHICH
HAS BEEN IDENTIFIED WITH THE SYMBOL “[*],” HAS BEEN
FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
FIRST AMENDED & RESTATED SUPPLY AGREEMENT
(Suntech Contract No.
____________
)
This
First Amended & Restated Supply Agreement is made as of
May 12, 2008 (the “
Effective Date ”)
between WUXI SUNTECH POWER CO., LTD. ,
a
People ’
s
Republic of China company (hereinafter
“
SUNTECH ”)
and HOKU
MATERIALS, INC., a
Delaware corporation (hereinafter “
HOKU ”).
SUNTECH and HOKU are each referred to in this Agreement as a
“
Party ”
and collectively as the “
Parties .”
Recitals
Whereas,
HOKU and SUNTECH are parties that certain Supply Agreement
(Suntech Contract No. PUR1-0706092) dated as of June 13, 2007
(the “
Supply Agreement ”),
pursuant to which HOKU agreed to sell to SUNTECH, and SUNTECH
agreed to purchase from HOKU, polysilicon for SUNTECH’S
general use beginning in calendar year 2009 for a continuous period
of either seven or ten years from the date of the first
shipment.
Whereas,
HOKU and SUNTECH desire to amend and restate the Supply
Agreement as hereinafter set forth to confirm the ten year
term of the Supply Agreement, and such other terms as set
forth herein.
Whereas,
HOKU desires to supply polysilicon to SUNTECH for its general
use beginning in calendar year 2009 for a continuous period of
ten years from the date of the first shipment.
Whereas,
in exchange for HOKU’s agreement to allocate the supply
of polysilicon, SUNTECH desires to provide HOKU with a firm
order for polysilicon upon the terms and conditions provided
herein.
NOW,
THEREFORE, in furtherance of the foregoing Recitals and in
consideration of the mutual covenants and obligations set
forth in this Agreement, the Parties hereby agree as
follows:
Agreement
1.
Definitions .
The
following terms used in this Agreement shall have the meanings
set forth below:
1.1.
“
Affiliate ”
shall mean, with respect to either Party, any entity that controls,
is controlled by or under common control with such Party, where
“control” of an entity means ownership of more than
fifty percent (50%) of the stock or equity of such entity entitled
to vote for the election of directors (or, if such entity is not a
corporation, the corresponding managing authority).
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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1.2.
“
Agreement ”
shall mean this First Amended & Restated Supply Agreement and
all appendices annexed to this Agreement as the same may be amended
by the Parties from time to time in accordance with the provisions
hereof.
1.3.
“
Business Day ”
shall mean a day (other than a Saturday or Sunday) on which banks
are open for general business in the United States.
1.4.
“
Facility ”
shall mean HOKU’s manufacturing facility in Pocatello, Idaho,
including all buildings and other improvements now or hereafter
owned, developed, constructed, or leased by HOKU at such facility
and used in the development, manufacture, processing, storage, or
distribution of Products, together with all machinery and equipment
used or usable in the operation of such buildings and
improvements.
1.5.
“
First Shipment Month ”
shall mean the first month in calendar year 2009 when HOKU ships
the Primary Monthly Quantity of Product to SUNTECH.
1.6.
“
Guaranteed Monthly Quantity of Product
”
shall mean [*] metric tons of Product during the [*] through [*]
Years, and [*] metric tons of Product during the [*] Years, if
applicable.
1.7.
“
Hoku Competitor ”
shall mean any commercial producer or vendor of raw polysilicon,
polysilicon ingots or wafers, or solar cells or
modules.
1.8.
“
Initial Financing ”
shall mean HOKU’s receipt of gross aggregate proceeds of at
least $75 million U.S. Dollars from bank debt, equity financing
(including the $25 million in proceeds from HOKU’s private
placement of common stock on February 29, 2008), customer
prepayments actually received in cash by HOKU for Products (not
including commitments for future prepayments, or amounts placed in
escrow or secured by letters of credit), or any combination of the
foregoing. For purposes of this Agreement, the terms “bank
debt” and “equity financing” shall mean straight
bonds or debentures, credit lines, convertible debt, common and
preferred stock, and warrants; and HOKU’s
“receipt” of such proceeds shall mean the receipt of a
binding and legally enforceable commitment from a lender to provide
the Initial Financing (or a portion thereof); provided, however,
that HOKU must have received, in cash, at least 66.7% of the
proceeds of such financing by December 31, 2008. HOKU shall provide
to Suntech written certification that it has obtained Initial
Financing, together with (in the event HOKU has not otherwise
publicly disclosed the components of such financing), reasonable
documentary evidence thereof.
1.9.
“
Minimum TCS Volume ”
shall mean [*] metric tons of TCS.
1.10.
“
Officer’s Closing Certificate
”
shall mean the certificate in substantially the form of Appendix 8
attached hereto wherein an executive officer of HOKU shall certify
to the satisfaction of certain conditions precedent as set forth
therein.
1.11.
“
Officer’s Compliance Certificate
”
shall mean a certificate in substantially the form of Appendix 9
attached hereto wherein an executive officer of HOKU shall certify
to the satisfaction of certain conditions precedent as set forth
therein.
1.12.
“
Primary Monthly Quantity of Product
”
shall mean [*] metric tons of Product during the [*] through [*]
Years, and [*] metric tons of Product during the [*]
Years.
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SUNTECH
Initials & Date
ZS May 12, 2008
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HOKU
Initials & Date
DS May 12, 2008
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1.13.
“
Product ”
shall mean raw polysilicon in chunk form conforming to the Product
Specifications to be sold by HOKU to SUNTECH pursuant to this
Agreement.
1.14.
“
Product Specifications ”
shall mean the quality and other specifications for the Product set
forth on
Appendix 2 to
this Agreement.
1.15.
“
Qualified Engineering Firm ”
means any engineering firm listed on
Appendix 3 that
(A) has more than five hundred (500) employees, and (B) is not a
HOKU Competitor.
1.16.
“
Reactor ”
shall mean a polysilicon deposition reactor.
1.17.
“
Secondary Monthly Quantity of Product
”
shall mean [*] metric tons of Product during the [*] through [*]
Years, and [*] metric tons of Product during the [*]
Years.
1.18.
“
TCS ”
shall mean trichlorosilane.
1.19.
“
Term ”
shall mean the 10-year period during which this Agreement is in
effect, as more specifically set forth in Section 1
0
of
this Agreement.
1.20.
“
Total Deposit ”
shall mean the Initial Deposit and the Main Deposit.
1.21.
“
Wafer ”
means a silicon wafer that can be processed into a photovoltaic
cell.
1.22.
“
Years ”
shall mean consecutive twelve (12) calendar month periods
commencing on the First Shipment Month. For avoidance of doubt, the
first Year is the twelve (12) calendar month period commencing on
the First Shipment Month, the second Year is the twelve (12)
calendar month period commencing on the first anniversary of the
First Shipment Month, etc.
2.
Ordering; Pricing .
2.1.
During
each calendar month of each Year, SUNTECH agrees to purchase
from HOKU, and HOKU agrees to sell to SUNTECH, the Guaranteed
Monthly Quantity of Product at the prices set forth on
Appendix 1 to this Agreement (the “
Pricing Schedule ”).
This
Agreement constitutes a firm order from SUNTECH, and a firm supply
commitment from HOKU, for [*] metric tons of Product that cannot be
cancelled or changed by either Party during the term of this
Agreement, except as set forth in Section 1 0
below
and the next sentence of this Section 2.1
.
At
any time during the Term of this Agreement, HOKU may reduce its
supply commitment to SUNTECH in writing for Years [*] to [*] metric
tons per year. In the event that HOKU exercises such option, the
definition of “Guaranteed Monthly Quantity of Product”
shall be reduced to [*] metric tons; and the definition of
“Secondary Monthly Quantity of Product” shall be
reduced to [*] metric tons. Any such option must be exercised by
HOKU in writing at least one hundred eighty (180) days prior to the
expected delivery date for such Products.
2.2.
If,
prior to the end of the [*] Year, all of the following
conditions have been satisfied: (A) HOKU has materially
increased its production capacity of Products, (B) HOKU has
paid all of its indebtedness to the Senior Lenders (as defined
in Section 7.2
below);
and (C) HOKU and SUNTECH have signed a contract providing for
the purchase and sale of additional volume of Products that is
in addition to the volume being sold under this Agreement,
then the Pricing Schedule for the remaining term of this
Agreement shall be amended and the prices for the Products
being sold pursuant to this Agreement shall be adjusted to
match the pricing for Products in such new contract.
Notwithstanding the foregoing, HOKU shall have no obligation
under this Agreement to increase its production capacity, to
pay its Senior Secured Indebtedness or to enter into a new
contract with SUNTECH, and SUNTECH shall have no obligation
under this Agreement to enter into a new contract with
HOKU.
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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3.
Supply Obligations .
3.1.
HOKU
shall deliver, in each calendar month during each Year
pursuant to this Agreement starting on the First Shipment
Month, the Guaranteed Monthly Quantity of Product; provided
however, that if HOKU fails to deliver the Primary Monthly
Quantity of Product for any given calendar month in such
calendar month, then HOKU may deliver the deficiency within
[*] days after the end of such calendar month (“
Primary Delivery Grace Period ”)
without breaching this section or incurring any purchase price
reduction pursuant to Section 3.3
below;
and provided further, that if HOKU fails to deliver the Secondary
Monthly Quantity of Product for any given calendar month in such
calendar month, then HOKU may deliver any deficiency within [*]
days after the end of such calendar month (“
Secondary Delivery Grace Period
”)
without breaching this section or incurring any purchase price
reduction pursuant to Section 3.3
below.
For the avoidance of doubt, all shipments for any given month shall
be applied first to the Primary Monthly Quantity of Product and
then to the Secondary Monthly Quantity of Product, and if there is
more than one shipment deficiency, each shipment shall be applied
to satisfy the oldest deficiency. At any time during the term of
this Agreement, HOKU may ship to SUNTECH the Guaranteed Monthly
Quantity of Product for any calendar month in advance of such
calendar month, but only with SUNTECH’s prior written
consent.
3.1.1.
During
calendar year 2009, HOKU shall ship to SUNTECH a minimum of
[*] metric tons of its output Products over and above the
supply commitments set forth in Section
3.1
above.
After HOKU delivers such [*] metric tons of Products to
SUNTECH in 2009, HOKU may sell the next [*] metric tons of
unallocated Products to any customer of its choosing
(including, without limitation, HOKU’s Other Customers
(as defined in Section 7.3
below)
and sales on the spot market). Thereafter, and provided that
SUNTECH has secured the Minimum TCS Volume for HOKU pursuant
to Section 13.1
below,
HOKU shall ship to SUNTECH a minimum of [*] percent ([*]%) of
its remaining unallocated Products in 2009. For purposes of
this Section
3.1.1
,
HOKU’s “unallocated Products” are limited to
Products produced by HOKU that are not subject to a
pre-existing contractual shipment obligation to HOKU’s
Other Customers. The net EXW price for such unallocated
Products sold to SUNTECH shall be the greater of (A) $[*] per
kilogram, and (B) the sum of (
x )
the multiple of (the gross price per kilogram of TCS (including all
shipping, handling, insurance, export, and similar costs) that is
purchased by HOKU pursuant to Section 13.1
)
times ([*]) and (
y )
$[*].
3.1.2.
In
any event, notwithstanding the foregoing, HOKU may not sell or
deliver any Product on the spot market, or otherwise sell or
deliver Product to any third parties other than pursuant to
long term supply contracts entered into by HOKU with such
third parties in compliance with Section
3.1.3
below,
in any given calendar month during the term of this Agreement
unless and until HOKU has fulfilled its Product shipment
obligations to SUNTECH for such calendar month and all
preceding calendar months.
3.1.3.
During
the first [*] Years, HOKU agrees that it will not enter into
any additional supply contract with, or make any supply
commitment to, any third party (not including the long term
supply contract that HOKU and SANYO entered into prior to the
Effective Date) if the aggregate of HOKU’s delivery
obligations under all of its supply contracts (including those
with SUNTECH and SANYO) and such additional supply
contract/commitment during any month would exceed the rated
monthly production capacity of all Reactors as certified by
the manufacturer thereof. Subject to the foregoing, this
Agreement shall not preclude HOKU from (A) entering into
supply contracts for additional capacity from Facility
expansion, including pre-sales of potential Facility
expansions, or from increased productivity of the Reactors, or
(B) selling on the spot market or entering into long-term
contracts for the sale of polysilicon that does not meet the
Product Specifications at any time during the term of this
Agreement, provided that HOKU uses commercially reasonable
efforts to meet the Product Specifications with respect to
such polysilicon and that HOKU does not manufacture
polysilicon for the purpose of making such spot market sales
or fulfilling such long term contracts.
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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3.1.4.
Notwithstanding
anything to the contrary, nothing in this Section
3.1
is
intended by the Parties, or shall be deemed, to waive, limit
or otherwise affect any other rights and remedies that SUNTECH
may have in connection with any HOKU failures to fulfill, or
delays in fulfilling, its Product supply obligations under
this Agreement.
3.2.
HOKU
intends to manufacture the Products at the Facility; however,
notwithstanding anything to the contrary herein, HOKU may
deliver to SUNTECH Products that are manufactured by a third
party, provided that the Products meet the Product
Specifications and price set forth in this Agreement.
HOKU
shall manufacture the Products only in the Facility, or in
other adequate, qualified manufacturing facilities that have
access to all necessary labor and equipment. In the event that
more than [*] of the polysilicon shipped to SUNTECH during any
calendar quarter fails to meet the Product Specifications
(which may be determined through testing of batches/samples),
such facilities shall be subject to inspection and/or
re-qualification audits by SUNTECH and/or its representatives
from time to time and upon reasonable prior written notice to
HOKU, and the polysilicon produced at such facilities shall be
subject to third party quality testing at a mutually agreeable
location (such agreement not to be unreasonably withheld or
delayed) and at HOKU’s sole expense. HOKU shall bear
such expense until less than [*] of HOKU’s polysilicon
shipments in a quarter do not meet Product Specifications.
HOKU shall have the right to pre-approve any third party
inspector selected by SUNTECH that is not a Qualified
Engineering Firm (such approval not to be unreasonably
withheld or delayed), which must not be a HOKU Competitor, and
such inspector shall be obligated to sign a commercially
reasonable non-disclosure agreement with HOKU. HOKU shall
continuously make available the necessary capacity at such
manufacturing facilities to meet Guaranteed Monthly Quantity
of Products and shall provide all labor, materials and other
items necessary to perform its obligations hereunder. For the
sake of clarity, the foregoing sentence is not a guaranty of
shipment; all Product delivery guaranties are specifically set
forth in Sections 2.1
,
and 3.1
above,
and Sections 3.3
,
and 5
below.
3.3.
If
HOKU does not complete shipment of the Primary Monthly
Quantity of Products or the Secondary Monthly Quantity of
Products for any month on or before the end of the applicable
Primary Delivery Grace Period or Secondary Delivery Grace
Period, the purchase price for the delayed Products shall be
reduced by [*] of the original purchase price for each week or
part thereof that the Product shipment is delayed beyond the
applicable Primary Delivery Grace Period or Secondary Delivery
Grace Period. Notwithstanding anything to the contrary, the
maximum amount of the cumulative purchase price reduction
shall not exceed [*] of the original price of the respective
delayed Products. Notwithstanding
the foregoing, the purchase price reductions shall not apply
(i) while a force majeure is continuing pursuant to
Section 14
and
(ii) in the event HOKU is not delivering Product due to a
payment default of SUNTECH pursuant to Section
10.2.1
.
4.
Wafers .
During
the Term of this Agreement, SUNTECH shall offer HOKU a continuing
right of first refusal to process the Products into Wafers (which
may include the use of a third party facility for such processing)
and supply Wafers to SUNTECH in lieu of Products on commercial
terms and Wafer specifications that are no less favorable to
SUNTECH than the terms and specifications which it is able to
receive from other third party wafer manufacturers at such time. If
HOKU utilizes a third party that is not an affiliate of HOKU to
process the Wafers, then SUNTECH shall have the right to
pre-approve (such approval not to be unreasonably withheld) such
third party and the specification of the Wafers being provided by
the third party. Until such time as HOKU and SUNTECH have mutually
agreed and entered into an agreement for the purchase and sale of
Wafers, and, if applicable, SUNTECH has approved the third party
Wafer manufacturing company, HOKU shall continue to deliver Product
to SUNTECH pursuant to the terms of this Agreement.
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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5.
Shipping & Delivery .
5.1.
The
first shipment of the Guaranteed Monthly Quantity of Product
is due on or before December 31, 2009; provided, however, that
HOKU shall provide at least thirty (30) days’ prior
written notice if the first shipment will occur prior to July
31, 2009; and, provided, further that HOKU shall deliver a
minimum of [*] metric tons of Products to SUNTECH in calendar
year 2009 (subject to the provisions of Section
3.1.1
above,
including the provision that may reduce such volume
requirement to [*] metric tons), and any deficiency shall be
subject to the purchase price adjustment pursuant to
Section 3.3
without
any grace period beyond December 31, 2009, except that if more
than [*] percent ([*]%) of the first [*] metric tons (subject
to the reduction of such shipment requirement to [*] metric
tons pursuant to Section 3.1.1
above)
is shipped after December 1, 2009, then the price per kilogram
of each such shipment shall be the calendar year 2010 price as
set forth on
Appendix 1 hereto.
5.2.
Shipments
shall be made from the Facility (or from a third party
facility if applicable pursuant to Section
3.2
above)
on a monthly basis. On or around the first day of each
calendar month, an estimated Product shipment schedule will be
provided by HOKU to SUNTECH covering such month and the
following eleven (11) months thereafter (the “
Shipment Schedule ”).
All Product shipments shall include a quality control certificate
from HOKU certifying that the Products have been tested pursuant to
HOKU’s quality control testing procedures to ensure that the
Products being shipped meet the Product
Specifications.
6.
Payments & Advances .
6.1.
HOKU
acknowledges that as of the date of this Agreement, SUNTECH
has provided HOKU with an initial deposit of Two Million U.S.
Dollars (US$2,000,000.00) (the “
Initial Deposit ”)
as advance payment for Products to be delivered under this
Agreement.
6.2.
Subject
to HOKU’s completion of the Initial Financing, SUNTECH
shall pay in cash to HOKU the additional sum of Forty-Five
Million U.S. Dollars (US$45,000,000.00) (the “
Main Deposit ”)
as an advance payment for Products to be delivered under this
Agreement in accordance with the milestone schedule set forth
below.
6.2.1.
[*]
of the Main Deposit (the “[*]
Installment ”)
shall be paid to HOKU within fifteen (15) Business Days after
HOKU’s successful completion of one [*] (as defined in the
next sentence) and HOKU’s delivery to SUNTECH of an
Officer’s Compliance Certificate dated as of the date of such
completion.
For
purposes of this Agreement, a “[*]” means [*]. SUNTECH
understands that the [*] is not meant to produce solar purity
polysilicon. SUNTECH shall, at its expense, attend the [*]. SUNTECH
may, at its option and expense, invite a third party technical
advisor to attend the [*] with or in lieu of SUNTECH. HOKU shall
provide written notice to SUNTECH no less than ten (10) Business
Days prior to the [*]. Any third party technical advisor that
SUNTECH requests to view the [*] must not be a Hoku Competitor, and
must sign a reasonable confidentiality agreement prior to
participating in the [*]. Upon completion of the [*], HOKU and
SUNTECH shall sign the [*] Certificate attached hereto as Appendix
5 (the “[*]
Certificate ”)
to indicate whether or not the [*] was successfully
completed.
6.2.2.
[*]
of the Main Deposit (the “[*]
Installment ”)
shall be paid to HOKU within fifteen (15) Business Days after
HOKU’s successful completion of the “[*]” (as
defined below) and HOKU’s delivery to SUNTECH of an
Officer’s Compliance Certificate dated as of the date of such
completion. For purposes of this Agreement, a “[*]”
means [*]. SUNTECH shall, at its expense, attend the [*]. SUNTECH
may, at its option and expense, invite a third party technical
advisor to attend the [*] with or in lieu of SUNTECH. HOKU shall
provide written notice to SUNTECH no less than ten (10) Business
Days prior to the [*]. Any third party technical advisor that
SUNTECH requests to view the [*] must not be a HOKU Competitor, and
must sign a reasonable confidentiality agreement prior to
participating in the [*]. Upon completion of the [*], HOKU and
SUNTECH shall sign the [*] Certificate attached hereto as Appendix
6 (the “
[*] Certificate ”)
to indicate whether or not the [*] was successfully
completed.
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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6.2.3.
[*]
of the Main Deposit (the “
[*] Installment ”)
shall be paid to HOKU within fifteen (15) Business Days after the
later of the date when [*]. Upon completion of the [*], HOKU and
SUNTECH shall sign the [*] Certificate attached hereto as Appendix
7 (the “
[*] Certificate ”)
to indicate whether or not the [*] was successfully
completed.
6.2.4.
In
the event that the Parties cannot resolve a dispute as to
whether a milestone has been achieved under Sections
6.2.1
,
6.2.2
,
and 6.2.3
,
the Parties cannot resolve the dispute in accordance with the
first two (2) sentences of Section 15.2
,
then the Parties agree to appoint an independent engineer (the
“
Independent Engineer ”)
to make the final determination regarding the success or failure of
the [*], the [*], or the [*], as applicable. The Independent
Engineer shall be selected by and reasonably acceptable to the
Collateral Agent, the Senior Secured Parties (as that term is
defined in the Intercreditor Agreement), HOKU and SUNTECH;
provided, however, that if the Collateral Agent, the Senior Secured
Parties, HOKU and SUNTECH cannot agree on the Independent Engineer
within ten (10) days, the Independent Engineer shall be selected
solely by the Collateral Agent and the Senior Secured Parties among
all Qualified Engineering Firms. The conclusion of the Independent
Engineer shall be final for, binding upon and non-appealable by
HOKU and SUNTECH with respect to the success or failure of the
applicable milestone. The fees and expenses of such Independent
Engineer shall be shared by HOKU and SUNTECH if the Independent
Engineer was hired to resolve a reasonable disagreement between
HOKU and SUNTECH regarding the success or failure of the applicable
milestone; such fees and expenses shall be paid solely by SUNTECH
if the Independent Engineer was hired because SUNTECH or its third
party designee either did not attend the applicable demonstration
(after notice having been provided pursuant to Section
6.2.1
or
6.2.2
,
as applicable), or did not confirm to HOKU in writing either the
success or failure of the applicable milestone; and such fees and
expenses shall be paid solely by HOKU if the Independent Engineer
was hired because HOKU did not confirm to SUNTECH in writing either
the success or failure of the applicable milestone, HOKU did not
perform the applicable demonstration in accordance with the terms
of Section 6.2.1
or
6.2.2
,
as applicable, or HOKU did not provide sufficient advance notice of
the applicable demonstration as specified in Section
6.2.1
or
6.2.2
,
as applicable.
6.2.5.
HOKU
shall use commercially reasonable efforts to complete each of
the milestones by its respective Target Date listed in the
table below. HOKU may attempt to achieve each milestone any
number of times, provided that the procedures set forth in
Section 6.2.1
,
6.2.2
,
or 6.2.3
,
as applicable, are followed; and, provided, further that if
any milestone is not completed by the respective Final Date
listed in the table below, SUNTECH shall have the right to
terminate the Agreement in accordance with Section
10.3.2
.
Notwithstanding anything to the contrary in this Agreement,
HOKU may achieve the [*], the [*] and the [*] in any order;
for example, HOKU may complete the [*], and SUNTECH shall pay
to HOKU the [*] Installment, as applicable, prior to HOKU
successfully completing the [*].
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Target Date
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Final Date
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[*]
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[* ]
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[*]
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[* ]
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[* ]
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SUNTECH
Initials & Date ZS May 12, 2008
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HOKU
Initials & Date DS May 12, 2008
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6.3.
Stand-by Letter of Credit .
6.3.1.
HOKU
acknowledges that as of the date of this Agreement, SUNTECH
has opened an irrevocable stand-by letter of credit with ABN
AMRO NV that is attached hereto as
Appendix 4 (the
“
Stand-by Letter of Credit ”)
in favor of HOKU in an amount equal to the Main Deposit against
SUNTECH’s failure to pay the Main Deposit (as defined
above).
6.4.
HOKU
shall invoice SUNTECH at or after the time of each shipment of
Products to SUNTECH. Taxes, customs and duties, if any, will
be identified as separate items on HOKU invoices. All invoices
shall be sent to the attention of SUNTECH’s Financial
Controller at SUNTECH’s address set forth in
Section 15.4
or
to such other address as SUNTECH may specify to HOKU in
writing. Payment terms for all invoiced amounts shall be [*]
days from date of invoice receipt. All payments shall be made
in U.S. Dollars.
6.5.
[*].
6.6.
At
least fifteen (15) days prior to each quarter in the sixth and
seventh Years of this Agreement, SUNTECH shall provide an
advance cash payment to HOKU (each such payment, a
“
Supplemental Deposit ”)
that is equal to (a) [*] of the net purchase price of all Products
scheduled to be shipped during such quarter at the then-applicable
price, less (b) the amount of the Supplemental Deposits paid by
SUNTECH for previous quarters (if any) that were not applied
against invoices
